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IFRS News

Welcome to IFRS News – a quarterly update fromthe Grant ThorntonInternational IFRS team.IFRS News offers asummary of the moresignificant developments in International FinancialReporting Standards(IFRS) along with insightsinto topical issues andcomments and views from the Grant ThorntonInternational IFRS team.

Our third edition of 2010 leads with theannouncement by the IASB that it willmodify its convergence strategy inresponse to concern over the largenumber of major proposals previouslyscheduled for exposure in the secondquarter of 2010. Despite themodification in strategy, the level ofplanned changes remains high. A special‘Convergence Update’ edition of IFRSNews, which sets out details of theprojects planned and their commercialsignificance, is available separately.

We continue with a report on newStandards that have been issued beforeturning our attention to IFRS-relatednews at Grant Thornton, and a moregeneral round-up of activities affectingthe IASB. We end with an overview ofthe proposals that the IASB currentlyhas out for comment, and theimplementation dates of newerStandards that are not yet mandatory.

Welcome Convergence New standards In the pipeline News Round up Open for comment

. IFRS News Quarter 3 2010 1

Effective dates

IASB modifies convergence strategy

Convergence between IFRS and USGAAP has been a priority for both theIASB and its US counterpart, FASB,ever since the G-20 (the Group ofTwenty Finance Ministers and CentralBank Governors) called for the twoBoards to complete their convergenceplan by June 2011.

Following concern fromstakeholders over the large number ofExposure Drafts that were originallyplanned for publication in the secondquarter of this year in order to meet that deadline, the two Boards haveannounced a modified strategy forconvergence.

Under the modified strategy, the two Boards will now: • prioritise the major projects in the

Memorandum of Understanding topermit a sharper focus onconvergence

• stagger the publication of ExposureDrafts to enable broad-based andeffective stakeholder participation inthe due process that is criticallyimportant to the quality of theirstandards

• issue a separate consultationdocument seeking stakeholder inputabout effective dates and transitionmethods.

Both Boards are very much aware of theimportance of the June 2011 target forcountries adopting IFRSs in 2011 or2012. For other countries, includingJapan and the United States, achievingcontinued improvement andconvergence will be an importantconsideration in deciding the role ofIFRS in their capital markets. The targetcompletion date of June 2011 hastherefore been retained for many of theprojects. For a few projects that are lessurgent however, the target completiondates have been extended into thesecond half of 2011.

The two Boards do not believe thatthe announcement of their revised strategywill have a negative effect on the USSecurities and Exchange Commission’splan to consider in 2011 whether andhow to incorporate IFRS into the USfinancial system.


IFRS News Special Edition – ‘Convergence Update’Despite the changes to the IASB and FASB’s convergence strategy, its effects arestill expected to be far reaching. A special ‘Convergence Update’ edition of IFRSNews sets out details of the projects planned and their commercial significance.

Welcome Convergence New standards In the pipeline News Round up Open for comment Effective dates

IASB issues 2010 annual improvements

Amendments address non-urgent (butnecessary) minor amendmentsThe IASB has published ‘Improvementsto IFRSs’ (‘2010 Improvements’) whichmakes minor amendments to nineIFRSs. The publication completes theIASB’s third round of annualimprovements, a process for makingnon-urgent, but necessary, minoramendments to IFRSs.

A summary of the issues addressed isgiven in the box.


2010 annual improvements

Standard affected Issue Summary of change Effective for periods

beginning on or after*

IFRS 1 First-time Accounting policy changes in Clarifies that a first-time adopter of IFRS does not apply IAS 8 to changes in accounting 1 January 2011

Adoption of the year of adoption policies that it makes when it first adopts IFRSs or to changes to those policies made during

International the periods covered by its first IFRS financial statements.

Financial Reporting Requires a first-time adopter to disclose and explain any changes made in its accounting

Standards policies or its use of the IFRS 1 exemptions between its first IFRS interim financial report and

its first IFRS financial statements.

Revaluation basis as deemed Extends the scope for use of event-driven fair value. In its first IFRS 1 financial statements, 1 January 2011

cost a first-time adopter may recognise an event-driven fair value measurement as deemed cost,

with the revaluation adjustment recognised in retained earnings. This applies even when the

event occurs after the date of transition, provided that this is during the periods covered by

its first IFRS financial statements. IFRS 1’s normal rules still apply at the transition date.

Use of deemed cost for Permits entities with operations subject to rate regulation to use the carrying amount of the 1 January 2011

operations subject to rate items of property, plant and equipment or intangible assets determined under the entity’s

regulation previous GAAP as deemed cost at the date of transition to IFRS.

IFRS 3 Business Transition requirements for Clarifies that contingent consideration balances arising from business combinations that 1 July 2010

Combinations contingent consideration from occurred before an entity’s date of adoption of IFRS 3 (Revised 2008) shall not be

a business combination that adjusted on the adoption date. Also provides guidance on the subsequent accounting for

occurred before the effective such balances.

date of the revised IFRS

* for a proper understanding of the effective date and transition requirements, reference should be made to the 2010 Improvements themselves.


Grant Thornton InternationalcommentThe guidance on use of deemed cost for operations subject to rateregulation will be particularly welcomein Canada, where companies are in theprocess of transitioning to IFRS.Without this exemption, somecompanies in the rate regulated sectormight otherwise have struggled toapply the normal IFRS requirements on a retrospective basis due to a lackof historic information and a lack ofreadily available fair value informationfor those assets. The other changes made by the

2010 Improvements address relativelyuncontroversial areas and are notexpected to have major repercussions.


2010 annual improvements

Standard affected Issue Summary of change Effective for periods

beginning on or after*

IFRS 3 Business Transition requirements for The choice of measuring NCI either at fair value or at the proportionate share in the recognised 1 July 2010

Combinations Measurement of non-controlling amounts of an acquiree’s identifiable net assets, is now limited to NCI that are present ownership

interests (NCI) instruments and entitle their holders to a proportionate share of the acquiree’s net assets in the

event of liquidation.

Clarifies that all other components of NCI shall be measured at their acquisition-date fair

values, unless another measurement basis is required by IFRSs.

Un-replaced and voluntarily Clarifies the guidance for the accounting of share-based payment transactions of the acquiree 1 July 2010

replaced share-based payment that were voluntarily replaced by the acquirer and acquiree awards that the acquirer chooses

awards not to replace.

IFRS 7 Financial Clarification of disclosures Clarifies the disclosure requirements of the standard to remove inconsistencies, duplicative 1 January 2011

Instruments: Disclosures disclosure requirements and specific disclosures that may be misleading.

IAS 1 Presentation Clarification of statement of Clarifies that entities may present the required reconciliations for each component of other 1 January 2011

of Financial changes in equity comprehensive income either in the statement of changes in equity or in the notes to the

Statements financial statements.

IAS 21 The Effects of Transition requirements for Amends the transition requirements to apply certain consequential amendments arising from 1 July 2010

Changes in Foreign amendments arising as a result the 2008 IAS 27 amendments prospectively, to be consistent with the related IAS 27

Exchange Rates, of IAS 27 Consolidated and transition requirements.

IAS 28 Investments Separate Financial Statements

in Associates, IAS 31 (Revised 2008)

Investments in Joint

Ventures

IAS 34 Interim Significant events and Aims to improve interim financial reporting by clarifying disclosures required, including the 1 January 2011

Financial Reporting transactions interaction with recent improvements to the requirements of IFRS 7.

IFRIC 13 Customer Fair value of award credits Clarifies that when the fair value of award credits is measured on the basis of the value of the 1 January 2011

Loyalty Programmes awards for which they could be redeemed, the fair value of the award credits should take

account of expected forfeitures as well as discounts or incentives that would otherwise be

offered to customers who have not earned award credits from an initial sale.

* for a proper understanding of the effective date and transition requirements, reference should be made to the 2010 Improvements themselves.


IFRS Taxonomy 2010 published

The International AccountingStandards Committee (IASC)Foundation has published the IFRS Taxonomy 2010. The IFRS Taxonomy 2010 is atranslation of IFRSs as issued at 1 January 2010 into XBRL (eXtensibleBusiness Reporting Language). It isconsistent with IFRSs and with theIFRS for Small and Medium-sizedEntities (SMEs), and for the first timeboth have been integrated into a singletaxonomy.

the taxonomy integrates the IFRSsand the IFRS for SMEs into a singletaxonomy for the first time

XBRL is a technology developed forthe automation of business informationrequirements, including the preparation,sharing and analysis of financialstatements. The IFRS taxonomy iseffectively a dictionary of data tags.Each tag describes a specific piece ofinformation that may be included in a set of IFRS financial statements,facilitating the electronic analysis of thestatements using software tools.

To accompany the publication of the IFRS Taxonomy 2010, the IASCFoundation is undertaking aconsultation with companies using IFRSand filing with the US Securities andExchange Commission. The aim of theconsultation is to establish that the IFRSTaxonomy is practical for filers and forusers of filed XBRL content.


How will XBRL affect you?XBRL is available for companies to use if they wish to, and the technology certainlyoffers many advantages when filing financial information. It offers companies afaster way of filing their financial statements and in the longer term promises costsavings in terms of efficiency (reduced manual data entry time and costs) andaccuracy. It also facilitates analysis of financial statements by investors.In practice, however, adoption of the technology is largely being driven by

governments, stock exchanges or regulators. Stock exchanges in China, Japan,Singapore and South Korea all mandate XBRL for example.Companies moving to XBRL will need to think carefully about the

implementation process. Choosing the correct software and putting in placeappropriate systems and controls (for example when mapping traditional reports to the IFRS taxonomy) will be key considerations.


IASB seeks feedback on extractive activities discussion paper

Discussion Paper aims to reducediversity in accounting practices byproposing a single financial reportingmodel for all extractive activitiesThe IASB is seeking feedback on adiscussion paper setting out proposalsfor a possible future IFRS for extractiveindustries. Unusually, the discussionpaper does not actually represent theviews of the IASB but sets out the viewsof a project team of national standard-setters from Australia, Canada, Norwayand South Africa for the IASB.

the project team proposes a singlefinancial reporting model for allextractive activities

IFRS does not currently providespecific guidance for exploration,evaluation, development and productionof minerals or oil and gas (IFRS 6‘Exploration for and Evaluation ofMineral Resources’ was issued as aninterim standard which permittedcompanies to continue with theirprevious accounting policies forexploration and evaluation activities). As a result there is considerable diversityin accounting practices betweencompanies, and some of the practicesapplied are not compatible with thegeneral principles within IFRSs.

To reduce this diversity inaccounting practices, the project teamproposes a single financial reportingmodel for all extractive activities. Fourmain issues are addressed in the paper:


Issue Proposal

1 How to estimate and classify quantities A common basis for defining ‘reserves and resources’ should be used.

of minerals or oil and gas reserves. The Discussion Paper proposes using the Committee for Mineral Reserves

International Reporting Standards Template for minerals, and the Petroleum

Resource Management System for oil and gas.

2 How to account for minerals or oil and The initial focus for accounting for minerals or oil and gas properties should be

gas properties. the legal rights to that property.

This is in contrast to existing practices, which generally focus on accounting

for the separate phases of extractive activities. Many of these are cost-deferral

models, and the costs capitalised are subject to carry-forward or write-off on the

basis of management decisions to continue with activities in a particular area,

or to abandon them.

3 How minerals or oil and gas properties Minerals or oil and gas properties should be measured at historical cost,

should be measured. supplemented with detailed disclosure about the entity’s minerals or oil and gas

properties.

4 What information about extractive The project team proposes to introduce disclosure requirements that would help

activities should be disclosed? users to assess the nature and extent of the risks involved in the extractive activities.

The aim would be to improve on current disclosures which are often driven by

national or regulatory requirements, many of which have evolved independently

and separately for minerals and for oil and gas.

The Discussion Paper is open for comment until 30 July 2010. In the light of the responses it receives, the IASB will decide either to

proceed directly to the development of an exposure draft, or to publish a discussion paper of its own.


IASB proposes improvements to disclosurerequirements for fair value measurements

The IASB has published ‘MeasurementUncertainty Analysis Disclosure forFair Value Measurements’. TheExposure Draft proposes to enhance thedisclosure requirements currentlycontained within IFRS 7 ‘FinancialInstruments: Disclosures’.

IFRS 7 currently contains a three-level ‘fair value hierarchy’. The fair valuehierarchy is intended to indicate the‘observability’ of the inputs used bycompanies in respect of financialinstruments which are measured at fairvalue. Within the hierarchy, level 3inputs are ‘unobservable inputs’ used forthe fair value measurement of assets orliabilities for which market data are notavailable.

The proposals set out in the IASB’sExposure Draft will enhance the currentrequirements by requiring themeasurement uncertainty analysisdisclosure to reflect theinterdependencies betweenunobservable inputs used to measure fairvalue in Level 3 of the hierarchy.

A fuller discussion of the proposalsin the Exposure Draft is set out in aspecial ‘Convergence Update’ edition ofIFRS News.



IASB proposes improvements to defined benefitpensions accounting

The IASB has published an ExposureDraft of proposed amendments to IAS19 ‘Employee Benefits’. The proposalswould notably remove the ‘corridormechanism’ currently permitted by IAS19. Entities would be required toaccount immediately for all estimatedchanges in the cost of providing thesebenefits and all changes in the value ofplan assets.



IASB proposes new revenue recognition standard

IASB and FASB joint Exposure Draft aims to improve and align the financial reporting of revenue The IASB has published the ExposureDraft ‘Revenue from Contracts withCustomers’. The Exposure Draft setsout proposals for a new standard whichwould replace IAS 18 ‘Revenue’ andIAS 11 ‘Construction Contracts’ andrelated interpretations.

The publication of the ExposureDraft is a significant step forward interms of the global convergence offinancial reporting. The proposals havealso been published by the US FASB inan Exposure Draft, meaning that, ifaccepted, a single revenue recognitionstandard would be applied acrossvarious industries and capital markets.

A fuller discussion of the proposalsin the Exposure Draft is set out in aspecial ‘Convergence Update’ edition of IFRS News.



IASB proposes improvements to the presentation of items of Comprehensive Income

The IASB is proposing to require entitiesto present profit or loss and othercomprehensive income in separatesections of a continuous statement. TheExposure Draft ‘Presentation of Items ofOther Comprehensive Income (proposedamendments to IAS 1)’ also proposes togroup items in Other ComprehensiveIncome on the basis of whether they willeventually be ‘recycled’ into the profit orloss section of the income statement.


Grant Thornton International commentAlthough these proposals may not see substantive, they are none the lesscontroversial. Some commentators view the move to a continuous performancestatement as an attempt to reduce the focus on net income in favour ofcomprehensive income.A fuller discussion of the proposals in these Exposure Drafts and their

commercial significance is included in a special ‘Convergence Update’ edition ofIFRS News, which can be obtained from the IFRS contact in your local office.


Grant Thornton LLP UK awarded Accountancy Firmof the Year

Our UK member firm, Grant ThorntonLLP, has added two more awards to itsgrowing trophy cabinet: AccountancyFirm of the Year at the M&A Awards on20 May 2010 and Accountant of theYear at the HealthInvestor Awardsceremony on 27 May 2010.

The UK firm was also recentlydeclared Large Six Auditor of the Yearfor the second time in three years at theFinance Directors’ Excellence Awards inLondon.



One Report: integrated reporting for a sustainablestrategy

Grant Thornton LLP, the U.S. memberfirm of Grant Thornton InternationalLtd, has published ‘One Report:Integrated Reporting for a SustainableStrategy’. The book is co-authored byglobal corporate reporting experts,Grant Thornton LLP partner Michael P.Krzus and Harvard Business Schoolfaculty member Robert G. Eccles.

The book advocates integratingfinancial and non-financial informationto improve corporate reporting andpromote a sustainable society. Itprovides expert insights, case studies andproven best practices that show howintegrating financial and non-financialinformation, such as environmental,social and governance performance(ESG), into a single report can drivesustainability into a company’s strategyand create value for the company, itsshareholders, and all other stakeholders.



US firm prepares a blueprint for a successful IFRSimplementation

Our US member firm has prepared anIFRS discussion document entitled‘Surveying the IFRS landscape:Preparing a blueprint for a successfulimplementation’. The document isdesigned to act as a discussion tool in thecontext of developing a plan to convertfrom U.S. GAAP to IFRS but containspoints that will be of interest to allcountries that are moving towards IFRS.

The document states that companiesare facing an increasingly internationalcommunity of investors when seeking toraise capital (noting that since September2008, 20 of the world’s largest 25 IPOswere on stock exchanges where IFRS isconsidered an acceptable basis ofreporting by national exchangeregulators). It emphasises the need todraw on knowledge from all facets of anorganisation when converting to IFRSand not just on that of the financedepartment. For example, it discusses anumber of key challenges for acompany’s Information Technology,Operations, and Tax departments tomeet:


Information Technology – key challenges• Identify modifications that need to be made to IT systems to collect and analyse additional data• Evaluate ways to extract required data from historical periods to facilitate accurate IFRS reporting• Modify the exchange of information among IT platforms to transfer information required for IFRSreporting

• Adjust the mapping of the chart of accounts to avoid the need for manual journal entries

Operations – key challenges• Capture information required to facilitate IFRS reporting and integration of accounting functions• Evaluate the impact on compensation and benefits and other performance-based metrics resultingfrom changes in profitability due to the adoption of IFRS

• If necessary, modify contract terms, including sales and creditarrangements, to avoid unfavourable accounting consequences from the adoption of IFRS

• Plan and conduct communications to outside stakeholders to preparethem for the impact of adopting IFRS

Tax – key challenges• Identify the impact on transfer pricing policies due to IFRS-adjusted financial results

• Establish whether there will be different thresholds in recording liabilities for uncertain tax positions


Grant Thornton International responds to IAS 37 Exposure Draft

The Grant Thornton International IFRSTeam has commented on the IASB’sExposure Draft ‘Measurement ofLiabilities in IAS 37’.

While we generally support theunderlying measurement objective setout in the Exposure Draft, we expressconcern as to the proposed requirementson its implementation. In particular, westrongly question the Exposure Draft’sproposal to include a profit margin inmeasuring a liability in all cases when anentity will itself provide the goods orservices required to fulfil the obligationin concern.



UK partner comments on search for new IASB Chairman

The search for a replacement for SirDavid Tweedie, IASB Chairman,continues. Having presided as IASBChairman since 2001, Sir David’s term aschairman is due to end in June 2011. Asearch for his successor was launched inDecember of last year, but noannouncement has been made as yet.

Commenting on the appointmentprocess, and the characteristics that SirDavid’s successor will need, SteveMaslin, chair of the partnershipoversight board of our UK memberfirm, stressed the need for the IASB tobe “much more politically aware”.“Let’s not forget also there is the rest ofthe board and a team of staff who canhelp with the heavy lifting on thetechnical side,” he said. “At this stage inthe IASB’s life, we would place politicalawareness ahead of technical[knowledge] for the chair, but of coursethe chair must be technically astute.”



Grant Thornton UK webcast on business combinations

Grant Thornton UK LLP’s assuranceteam has presented a webcast for clientsproviding an outline of IFRS 3 ‘BusinessCombinations’ accountingrequirements.

The webcast can be accessed onGrant Thornton UK LLP’s website(www.grant-thornton.co.uk).


The webcast includes:• an explanation of the accounting for a business combination from start to finish• a focus on significant changes and new guidance in IFRS 3 (Revised)• a practical case study to illustrate how the new rules work.


Grant Thornton International releases 2010 InternationalBusiness Report

Grant Thornton International hasreleased its 2010 International BusinessReport (IBR). The IBR monitors theattitudes and outlook of privately heldbusinesses in 36 countries. The survey isnow in its 17th year, and is unique toGrant Thornton International.

A sample of over 7,400 chiefexecutive officers, managing directors,chairmen or other senior executiveswere asked a range of questions in the2010 IBR. Included among them were anumber of questions related to the IFRSfor SMEs. Globally, half of businessowners (53%) said they were aware ofIFRS for SMEs. Of those companiesthat were aware of the Standard, half(52%) said they would like theircountry to adopt the IFRS for SMEs.Private businesses in Mexico (89%), thePhilippines (85%) and Chile (84%) were most supportive of a move towards IFRS for SMEs.

To read more about the GrantThornton International Business Report 2010, please go towww.internationalbusinessreport.com.



Grant Thornton International responds to AmortisedCost and Impairment Exposure Draft

The Grant Thornton International IFRSteam has commented on the IASBExposure Draft ‘Financial Instruments:Amortised Cost and Impairment’.

The Exposure Draft proposesadopting an expected loss approach tocalculating impairment on financial assets(see the January 2010 edition of IFRSNews). In our letter, we support theBoard in its attempts to addressweaknesses with the current incurred lossapproach to calculating impairment andalso express our belief that the expectedloss approach proposed in the ExposureDraft has theoretical advantages.

We are however concerned that theoperational challenges of implementingthe proposed approach may result incost and complexity that exceeds itsbenefits. Moreover, we believe that thesechallenges could be disproportionatelyburdensome for many non-financialinstitutions. We therefore suggest thatadditional (and more effective) practicalexpedients are needed if the Boarddecides to press ahead with theproposals in the Exposure Draft. Wealso recommend that the Boardconsiders carefully the advice of itsExpert Advisory Panel (see round upsection) when dealing with theoperational problems that are likely tobe encountered.



Grant Thornton International leader in Germanaccounting magazine

The June and July 2010 editions of ‘IRZ –Zeitschrift für Internationale Rechnungs-legung’, a magazine devoted tointernational accounting issues, featurearticles by Gernot Hebestreit, Globalleader for business development andclient service at Grant ThorntonInternational.

The articles discuss the proposedchanges to IAS 37 ‘Provisions,Contingent Liabilities and ContingentAssets’ (see the January and April 2010editions of IFRS News). IRZ magazineoffers a mix of detailed backgroundinformation and practical solutions toeveryday accounting issues, and featureseditors from Germany, Austria andSwitzerland who are renowned asexperts in their field.



Canadian partner warns on use of spreadsheets in IFRS compliance

Chris Anderson of Grant ThorntonCanada has authored an article for theCanadian Institute of CharteredAccountants entitled ‘IFRS andSpreadsheets: A High-RiskCombination’.

The article looks at the dangersassociated with using spreadsheets tocomply with IFRS, and suggests ways ofmanaging these risks. The guidancegiven will be of particular interest tothose countries that are transitioning toIFRS. The ‘IT Advisory Committee(ITAC) Brief’ can be viewed in Frenchand English on the Canadian Institute ofChartered Accountants website(http://www.cica.ca/research-and-guidance/it-advisory-committee/publications).



Round-up

Summary of Expert Advisory Paneldiscussions on impairment offinancial assetsPrior to the closure of the comment periodof its Exposure Draft ‘Financial Instruments:Amortised Cost and Impairment’, the IASBreleased a summary of the discussions todate of its Expert Advisory Panel (EAP) onthe Exposure Draft.

the EAP believes the two overarchingoperational issues with the expectedcash flow approach can besuccessfully overcome

The EAP was set up shortly afterpublication of the Exposure Draft, itsprimary objective being to explore howoperational challenges of the expectedcash flow (ECF) approach proposed mightbe resolved. The summary notes that theEAP believes that what are seen as thetwo overarching operational issues withthe ECF approach – the allocation of initiallosses and estimating the lifetimeexpected loss of a financial asset – can be successfully overcome.

IVSC publishes Exposure Draft fornew ‘International ValuationStandards’The International Valuation StandardsCouncil (IVSC) has published an ExposureDraft of proposed new ‘InternationalValuation Standards’ (IVS). The proposalsreflect current developments inInternational Financial ReportingStandards and cover valuations for mosttypes of asset, including for the first timea proposed standard for financialinstruments. The IVSC is charged with developing

robust and transparent procedures forperforming international valuationsthrough a single set of globallyrecognised valuation standards.

EFRAG and European nationalstandard-setters publish summary ofcomments received on theirPerformance Reporting DiscussionPaperEFRAG and the European nationalstandard-setters have published‘Performance Reporting – summary ofcomments in response to the EuropeanDiscussion Paper’. The EuropeanDiscussion Paper referred to in the titlewas itself issued in March 2009 as part ofthe European pro-active work andaddressed a number of fundamentalissues about the presentation of financialperformance information that the IASB’sown discussion paper on the samesubject did not address, such as: • should the net income line be retained? • (if it should be retained) what should thebasis be for determining whethersomething is within net income oroutside net income?

• what role should recycling have inperformance reporting?

SEC Chairman reiterates UScommitment to global standardsMary Schapiro, Chairman of the SEC, hasreaffirmed the SEC’s commitment tocreating a system of high-quality, globally-accepted accounting standards. In apresentation to the annual conference ofthe Chartered Financial Analyst (CFA)Institute, Ms Schapiro dispelled a numberof what she termed ‘myths’ which hadbeen circulating. These included theimpression that the US is “dragging itsfeet regarding adoption of IFRS”, and that“America is protecting its parochialinterests”.



IASC Foundation and IASB launchinvestor participation programme The Trustees of the InternationalAccounting Standards Committee (IASC)Foundation and the IASB have launched aprogramme for greater investmentparticipation in the development of IFRS.The programme will result in:• a dedicated section on the IASBwebsite containing a variety ofresources for investors

• the publication of timely updates onfinancial reporting matters, known asInvestor Perspectives

• dedicated plans to seek investor inputfor each project

Adoption of the IFRS for SMEsThe list of jurisdictions around the worldthat have adopted, or are planning toadopt, the IFRS for SMEs continues to grow(there were 60 jurisdictions according tothe latest IASB figures). Recent additions tothe list include Egypt (an exposure draft ofa proposed Egyptian Accounting Standardfor SMEs is being developed) and Tanzania(the National Board of Accountants andAuditors of Tanzania has clarified whichentities are permitted to use the IFRS forSMEs).

IFRS for SMEs in the European UnionThe European Financial ReportingAdvisory Group (EFRAG) has submitted tothe European Commission its analysis ofthe IFRS for SMEs’ compatibility with theEU Accounting Directives. EFRAG’s conclusion is that there are

just six detailed aspects of the IFRS forSMEs that are incompatible with thecurrent text of the European Union’sAccounting Directives. The EuropeanCommission had requested EFRAG’sadvice as part of its wider consultation onthe possible role of the IFRS for SMEs inthe European Union.

IFRS for SMEs: Spotlight on BrazilAs reported in last quarter’s edition ofIFRS News, Brazilian SMEs can nowchoose to apply the IFRS for SMEs. Commenting on the change to the

country’s financial reporting landscape,Robson Leonardo Rodrigues of ourBrazilian member firm, Terco GrantThornton, said:“The adoption of a single set of high

quality accounting standards by BrazilianSMEs will bring real benefits such asgreater transparency and reliability inreported financial information, greatercertainty for Brazilian and foreigninvestors, a reduction in companies’ costof capital, more professionalism, and agood level of corporate governance.Furthermore, should a SME decide toenter the capital markets, it will havemade a great step towards compliancewith the full accounting standardsrequired for capital markets companies.”



Open for comment

This table lists the documents that theIASB currently has out to comment andthe comment deadline. Grant ThorntonInternational aims to respond to each ofthese publications.

Current IASB documents

Document type Title Comment deadline

Exposure Draft Conceptual Framework for Financial Reporting: The Reporting 15 July 2010

Entity

Exposure Draft Fair Value Option for Financial Liabilities 16 July 2010

Discussion Paper Extractive Industries 30 July 2010

Exposure Draft Defined Benefit Plans (proposed amendments to IAS 19) 6 September 2010

Exposure Draft Measurement Uncertainty Analysis Disclosure for Fair 7 September 2010

Value Measurements

Exposure Draft Presentation of Items of Other Comprehensive Income 30 September 2010

(proposed amendments to IAS 1)

Exposure Draft Revenue from Contracts with Customers 22 October 2010



Effective dates of new standards and IFRIC interpretations

The table below lists new IFRSStandards and IFRIC Interpretationswith an effective date on or after 1January 2009. Companies are requiredto make certain disclosures in respect ofnew Standards and Interpretationsunder IAS 8 ‘Accounting Policies,Changes in Accounting Estimates andErrors’.


New IFRS Standards and IFRIC Interpretations with an effective date on or after 1 January 2009

Title Full title of Standard or Interpretation Effective for accounting Early adoption permitted?

periods beginning on or after

IFRS 9 Financial Instruments 1 January 2013 Yes (extensive transitional rules apply)

Various Annual Improvements 2010 1 January 2011 unless Yes

otherwise stated (some are

effective from 1 July 2010)

IFRIC 14 Prepayments of a Minimum Funding Requirement 1 January 2011 Yes

– Amendments to IFRIC 14

IAS 24 Related Party Disclosures 1 January 2011 Yes (either of the whole Standard or

of the partial exemption for

government-related entities)

IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures 1 July 2010 Yes

for First-time Adopters (Amendment to IFRS 1)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010 Yes

IAS 32 Classification of Rights Issues (Amendment to IAS 32) 1 February 2010 Yes

IFRS for SMEs International Financial Reporting Standard for Small and Immediately subject to approval N/A

Medium-sized Entities within the individual jurisdiction

Various Annual Improvements 2009 1 January 2010 unless Yes

otherwise stated (some are

effective from 1 July 2009)







IFRS 1 Additional Exemptions for First-time Adopters (Amendments 1 January 2010 Yes

to IFRS 1)

IFRS 2 Group Cash-settled Share-based Payment Transactions 1 January 2010 Yes

(Amendments to IFRS 2)

IFRS 1 First-time Adoption of International Financial Reporting 1 July 2009 Yes

Standards (Revised 2008)

IAS 39 Amendment to IAS 39 Financial Instruments: Recognition 1 July 2009 Yes

and Measurement: Eligible Hedged Items

IFRIC 17 Distributions of Non-cash Assets to Owners 1 July 2009 Yes (but must also apply IFRS 3

Revised 2008, IAS 27 Revised 2008

and IFRS 5 (as amended by IFRIC 17))

IFRS 3 Business Combinations (Revised 2008) 1 July 2009 Yes (but only for periods beginning on

or after 30 June 2007, and in

conjunction with IAS 27 Revised 2008)

IAS 27 Consolidated and Separate Financial Statements 1 July 2009 Yes (but must be applied in

(Revised 2008) conjunction with IFRS 3 Revised 2008)

IFRIC 18 Transfers of Assets from Customers Transfers of assets on or Yes provided the valuations and other

after 1 July 2009 information needed to apply the Inter-

pretation to past transfers were obtained

at the time those transfers occurred



© 2010 Grant ThorntonInternational Ltd. All rightsreserved. Grant ThorntonInternational Ltd (GrantThornton International) andthe member firms are not a worldwide partnership. Services are deliveredindependently by themember firms.





IAS 32 and IAS 1 Amendments to IAS 32 Financial Instruments: Presentation 1 January 2009 Yes (but must be applied in

and IAS 1 Presentation of Financial Statements: Puttable conjunction with related amendments

Financial Instruments and Obligations Arising on Liquidation to IAS 39, IFRS 7 and IFRIC 2)

IFRS 1 and IAS 27 Amendments to IFRS 1 First-time Adoption of International 1 January 2009 Yes

Financial Reporting Standards and IAS 27 Consolidated and

Separate Financial Statements

IFRS 7 Amendments to IFRS 7 Financial Instruments Disclosures: 1 January 2009 Yes

Improving Disclosures about Financial Instruments

IFRS 2 Amendment to IFRS 2 Share-based Payment: Vesting 1 January 2009 Yes

Conditions and Cancellations

IAS 1 Presentation of Financial Statements 1 January 2009 Yes

IAS 23 Amendments to IAS 23 Borrowing Costs 1 January 2009 Yes

IFRS 8 Operating Segments 1 January 2009 Yes

IFRIC 15 Agreements for the Construction of Real Estate 1 January 2009 Yes

Various Annual Improvements to IFRSs 2008 1 January 2009 (unless Yes

otherwise stated)


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